You know that times are changing when one of the world’s major states bans the Le Miserable’s song Do You Hear the People Sing? That’s what the Chinese Communist Party (CCP) did last week.
Thousands have marched through the streets of Hong Kong over the last month demanding democratic rights. University and school students have boycotted classes and occupied buildings in its financial district.
The Hong Kong Confederation of Trade Unions (HKTUC) called its members out on Monday of last week. It said, “Workers and students must unite to force the totalitarian government to hand state power back to the people”.
Hong Kong’s leader Leung Chun-ying—a private real estate tycoon—is against the protests, as are the majority of capitalists. But banker Edward Chin has founded the Banking and Finance Professionals support group.
Police arrested dozens of people on the mainland last week for posting online pictures of themselves carrying Hong Kong solidarity posters. But while the CCP has condemned the protests in Hong Kong, it has not directly intervened.
This is officially because of the “One Country, Two Systems” deal that means there is less repression in Hong Kong. The “two systems” model was formulated by CCP leader Deng Xiaoping in the 1980s.
It was seen as a means of regaining control of territories such as Hong Kong, Macau and Taiwan. But that relationship has been shaped by capitalist development in Hong Kong and in China since its move away from bureaucratic state capitalism.
In the 1970s, the Chinese ruling class faced a crisis as the country sank deeper into stagnation. The reforms that were adopted in response by Deng Xiaoping’s premiership ultimately paved the way for China to become a capitalist powerhouse.
This period saw moves towards free market reforms, such as dismantling rural collectives and liberalising prices. But it also included opening up to foreign capital in designated Special Economic Zones (SEZs) on the south eastern seaboard. This liberalisation process helped to create a new market capitalism in the south eastern Guangdong province opposite Hong Kong.
The CCP regime also allowed the new industries to link up with foreign capitalist interests—including in Hong Kong. This success of Guangdong SEZ convinced the party leadership to roll it out.
But an important part of Deng Xiaoping’s strategy relied on links with Hong Kong. Hong Kong was a British colony until 1997 (see right) and was among the “Asian Tiger” economies that grew rapidly in the post-war period. Its initial growth was based on low cost manufacturing industries.
But by the 1970s it was facing a labour shortage and intense competition from rivals—and one competitor was emerging right across the border. Hong Kong’s capitalists needed a way out.
The fledgling Guangdong SEZ, with its abundance of cheap labour and land, provided the answer. During the late 1980s Hong Kong’s capitalists were beginning to shift their manufacturing operations to China.
While manufacturing declined in Hong Kong, its companies employed millions of Chinese workers. The interests of Hong Kong’s capitalists were becoming more and more intertwined with China.
In the late 1980s the Chinese ruling was once again faced with a crisis. It needed new markets and opportunities for investment and Hong Kong was an important intermediary for investment into the mainland. Even in the middle of the 1990s around two thirds of foreign direct investment came through Hong Kong.
Chinese capital also recycles a lot of its money through Hong Kong in order to gain tax breaks. In 1989 the ruling CCP faced a crisis from below, with massive unrest that culminated with the demonstrations in Tiananmen Square.
In Hong Kong there was a large solidarity movement, both in the streets and among organised groups of workers. The Chinese ruling class is worried once again—in particular by the Occupy movement in Hong Kong.
It has hiked the defence budget for the third year running, but it still spends more on internal security. This indicates the problems the ruling class has on its hands.
It is facing territorial disputes and inter imperialist rivalry with the US and Japan, but it is also only too aware of the internal threat. The government tried to offset China from the global crisis by pumping huge investments into infrastructure.
But the crisis has not been permanently averted with many funds siphoned off into speculative building projects and a growing “shadow banking” sector. Chinese bosses also face increasing levels of workers’ struggle.
While there are no independent trade unions the number of strikes continues to increase. The online China Labour Bulletin records a two fold increase in the number of strikes in the last year.
And strikes are only one part of what are referred to as mass incidences. There have also been protests over pollution and land grabs.
Hong Kong also has a labour movement that has shown its industrial muscle in recent years.
The ruling class’s constant worry is that protests—such as the Mothers of Tiananmen— would inspire ordinary people to challenge their own rulers.
That’s why the CCP banned news of the Arab Spring in China. Many of Hong Kong’s capitalists have benefited from their relationship with China.
That’s why on the whole business has been against the protests. The minority that hasn’t wants to maintain its autonomy.
It also looks at China’s wildcat strikes and sees the potential for independent trade unions to act as a pressure valve.
China wants to maintain its rule of Hong Kong and use the “two system” model to gain control of Taiwan. The contradictions facing “Capitalism with Chinese characteristics” and the increasing inequality and poverty faced by many workers has made China a tinder box. And the Occupy movement in Hong Kong has the potential to set it alight.
Britain’s repressive rule in Hong Kong
Britain grabbed Hong Kong by force in 1841 as a base for a huge drug running operation.
British merchants began arriving in China in the 18th century. But its rulers were cautious about opening up and confined foreign traders to the city of Canton (Guangzhou).
Britain unleashed a series of wars when China’s rulers moved to suppress the most lucrative opium trade it in the 1830s.
The British forced the Chinese to retreat and hand over Hong Kong island as a colony. There was no democracy.
Britain’s unelected governor ran the colony, appointing both an executive and legislature. This system lasted until the 1990s.
One 19th century report described how the Chinese were “treated as a degraded race of people not permitted to go out into the streets after a certain hour in the evening without a lantern and a written note from their employer”.
Then in 1898 Britain took control of the “New Territories” which make up 90 percent of Hong Kong. But they were on a 99 year lease, to discourage other Western powers from annexing parts of China.
The British hung on to the colony even after foreign domination was removed from most of China in 1949.
The British government owned all the land in Hong Kong so long after the decline of empire made a profit from the colony.
But there was also resistance. In the 1920s workers were at the centre of a great workers’ and nationalist revolt that swept across China.
A huge 17-month general strike in 1925 helped weaken foreign control. After British and French troops kiiled demonstrators in Guangzhou, some 250,000 strikers and their families left Hong Kong and imposed a blockade on all shipping in the port.
British also responded with repression. In 1956 police opened fire on rioters killing 59 and wounding hundreds. The British lease ran out in 1997.
China’s capitalism and the crisis
Jane Hardy and Adrian Budd in International Socialism journal
The Mandate of Heaven—Marx and Mao in modern China by Nigel Harris
A look at the history of China’s Communist Party, read it here: http://www.marxists.de/china/harris/